Terra aims to do development its own way

He was just 23 when he and his father Pedro, then a partner at the Miami law firm Greenberg Traurig, founded the real estate firm Terra in 2001.

“David and I had been toying with the idea of starting our own company since he was an undergraduate,” said Pedro Martin, Terra’s CEO. “I told him to get an MBA, get a law degree so at least you can have a good profession if it doesn’t work out.”

The younger Martin graduated from the University of Florida with his advanced degrees, and father and son began raising investments from friends and associates.

“I like this business and I work hard. But David, I quickly saw, has an incredible passion for development and working with the community,” said Pedro Martin, a engineer-turned-lawyer who was born in Cuba and fled the island with his parents in 1961.

Alicia Cervera, one of Miami’s preeminent real estate brokers, has worked with Terra and said that the two men, while very close, have markedly different styles.

“I think the father has more of the caution of a very good lawyer,” Cervera said. “David is careful, too, but he’s also very much an entrepreneur. He has that clear, focused, driving vision of an entrepreneur.”

The younger Martin’s approach might strike some sports fans as a real estate version of Moneyball, Michael Lewis’ 2003 book about the Oakland Athletics and the team’s strategy of looking for value in unexpected places.

“I’m always asking myself: How can we find neighborhoods where we can uncover inefficiency or some sort of idea that’s never been executed?” said Martin, now 37 and Terra’s president and chief operating officer.

For Terra, that meant turning its eye away from Miami Beach and looking at the city’s less developed neighborhoods where land was cheaper.

In 2006, the company completed two towers with nearly 400 luxury condos near the Dadeland South Metrorail stop. Called Metropolis, it was an early example of the transit-oriented development now becoming more popular in congested Miami-Dade County.

Terra also decided to become a full-service, integrated real estate firm, keeping some of its most important functions in-house. In 2005, Terra began operating a construction management company. In 2006, it opened a realty firm. In 2007, it launched its own mortgage bank.

“Having these experts inside the company doing business with us on a daily basis helps us make much more calculated, educated decisions,” Martin said.

In the coming years, Terra developed several properties in downtown Miami, finishing them up in the early days of the crash. That allowed the firm some breathing space and enough capital to figure out its next move as the tsunami of the financial crisis demolished South Florida’s real estate market.

“One of the things we realized is that we can’t lose sight of the fact that in Miami we have suburbs,” Martin said. “Investing in suburbs allows us the opportunity to diversify.”

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Today, Terra is developing a mixed-use project in Doral, pairing 150,000 square feet of retail anchored by a Publix with 319 single-family homes. Prices for the houses start at $600,000.

The company also paid $30 million for a golf course in Weston last summer, according to Broward County property records, and plans to build a luxury gated community with 125 homes.

Terra now has about $3 billion under development, according to Martin.

But the project that has probably brought the most attention to Terra is the Grove at Grand Bay, two ultra-luxury towers going up on the site of the old Grand Bay Hotel in Coconut Grove.

The condos recently set a record price for the Grove at an average of $1,100 per square foot. The neighborhood, known for its bohemian reputation and lush vegetation, hadn’t seen a new high-rise in 10 years, completely missing out on the pre-recession boom.

Residents have certainly noticed the new towers, which in an unusual design twist their way 20-stories into the sky. One local blogger compared them to “a stack of bar napkins.”

Prominent architect Bjarke Ingels, who designed the $400 million towers and was recently tapped for Google’s new headquarters, said the innovative, sculptural approach was meant in part to remove any seeming disparity between the two towers.

“We didn’t want to make a good tower in front and a bad tower in back,” said Ingels, who is from Denmark but now works out of New York. “This way, the towers are front and back on the lower levels, but as they go upward, twist and become side-by-side.”

The towers have won some important fans, both among the local buyers who traditionally make up the bulk of the Grove’s market and the Latin American buyers who have fueled Miami’s wider real estate boom but never thought about settling in the Grove.

Ezra Katz, a major South Florida real estate investor, has a view of the Grand Bay towers from his office building in Coconut Grove. (Terra is headquartered in the same building.)

Katz said that building the towers in their unusual style was a big risk — but one that has paid off handsomely, as the record sale price showed.

“I don’t think I would have had the guts to pull the trigger on that kind of design,” Katz said. “It’s one of the most unusual designs I have seen in the United States of America, and I’ve been in the business for 40 years.”

Katz was so so impressed that he and his wife bought a unit in the building.

“Sometimes it takes someone as young as David to be that kind of pioneer,” he added. “He is pushing the limits of design in Miami much further than they’ve ever been.”

The towers are expected to be delivered in the last quarter of this year.

In partnership with the Related Group, Terra is working on another Coconut Grove development, a three-tower project called Park Grove that will cost $680 million and is being designed by another star architect, Rem Koolhaas. About 75 percents of the units there have sold.

The luxury condos are part of a broader resurgence in the Grove, where Martin now lives with his wife and two young children and where he spent much of his time as a teenager growing up in neighboring Cocoplum.

A true Miamian, Martin sometimes peppers his speech with “bro” and “dude,” his expressive eyebrows pumping up and down when he makes a particularly emphatic point like this one: One of Terra’s philosophies is that development should contribute to a neighborhood — enhancing its character without disrupting it.

“Typically in real estate, more density leads to more value,” he said. “And early on in the company’s history, our approach was: Let’s buy the land as cheaply as possible and try to pack as much density on it as we can.”

“But something we learned after the crash was that less is sometimes more,” Martin continued. “People want intelligent luxury now. At the Grand Bay, we were zoned for 440 units, but we only built 98.”

Nasir Kassamali, who owns the Doral-based design firm Luminaire and introduced Martin to the architect Ingels, said Martin’s deep roots in Miami have helped him understand the “ecosystems” of the areas he develops.

“Coconut Grove is not Brickell, it’s not the Beach, it’s a very bohemian village,” Kassamali said. “Their philosophy is to build good buildings with good architecture and improve the neighborhood without overwhelming it.”

Terra is also still developing Miami Beach, where it started out.

Last year, it delivered Glass, an 18-story building in the South of Fifth neighborhood that a previous developer had planned to fill with 45 units. Terra took that down to 10.

In North Beach, Terra has hired the world-famous architect Renzo Piano to design a 20-story tower with 69 luxury condos on the northern edge of a 25-acre park. That project will wrap up in 2017.

For an architect, working with a family-owned company can have major advantages, Ingels said.

“When it’s a family-owned company, it’s not just about the return of investment for shareholders that might have a very short-sighted view,” Ingels said. “It’s really about building a legacy, and if you screw up, you don’t only screw up a company you can walk away from, you screw up your family name.”

Ingels said he hopes to work with Terra again.

“One of the funny and challenging things about David is that — once a direction has been decided for a project — he is incredibly impatient to get things done,” Ingels said. “We would agree on something in Miami, and then he would call me as I was leaving the airport in New York to ask for updates. But it means we make progress incredibly quickly.”

“In other contexts, he might be diagnosed with ADD,” Ingels continued. “But in this case, I think he’s found a very productive way of channeling his urgency.”

Terra

Business: Terra is a full-service real estate developer with an in-house construction management company, a mortgage bank and a realty firm. Founded by father-and-son team Pedro and David Martin in 2001, Terra has a diversified approach to real estate, developing luxury condos downtown and on the beach and bringing mixed-use and single-family projects to the suburbs. It also develops commercial and office properties. In recent years, the firm has engaged some of the world’s leading architects, including Renzo Piano, Rem Koolhaas and Bjarke Ingels. It was an early believer in the promise of the emerging neighborhoods in Miami’s downtown and is also bringing Coconut Grove its first high-rise luxury condo towers in 10 years.